Phosphates market picks up as US prepares for TFI conference

LONDON (ICIS)–The phosphates market has seen more activity this week, as ongoing tight supply pushed prices higher in most regions, sources said on Friday.

In Pakistan, a diammonium phosphate (DAP) deal has been concluded from China, which indicated higher offer prices from producers. Availability in China remains tight due to ongoing environmental restrictions and commitments to the domestic market during the peak season.

More DAP demand is expected from the Indian subcontinent, which could prove problematic as most producers in China, Saudi Arabia and northern Africa are sold out through October.

The other big news in the market is the Ethiopia NPS (nitrogen, phosphorus, sulphur) tender, which has seen price offers opened this week. Moroccan producer OCP was the lowest offer for all lots offering at around $80/tonne less than the other producers. The shipment period is November-June, which could take a lot of OCP product out of the market, especially at a time when Brazilian buyers are enquiring for tonnes for the safrinha season for early next year.

West of Suez, the market has been dominated by news of Hurricane Irma in the US. Phosphates production at Mosaic plants in Florida has been affected and the producer has declared force majeure.

On 14 September, Mosaic raised its offer prices to the domestic prices for DAP and monoammonium phosphate (MAP) by $20/ton ($22/tonne) effective immediately.

Market players are still digesting the impact of the hurricane, but there are expectations of a price recovery. Most participants will be out of the market next week, as they will gather at The Fertilizer Institute (TFI) conference in Washington DC.

However, it is still unclear how tight MAP availability will be in the coming weeks, with Mosaic production down and OCP committing tonnes to Ethiopia.

On the supply side, most producers are sold out in September and some are comfortable for October. Russian suppliers will be busy with commitments to the domestic market in September and SABIC and Ma’aden in Saudi Arabia are sold out through October, with shipments to India, Pakistan, Bangladesh and Latin America.

A producer said that “continuing limited supply pushed the market up. China is very tight and barely to commit their shipments in Bangladesh with high restrictions in production since the winter is coming in.”